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Technology Stocks : InfoSpace (INSP): Where GNET went! -- Ignore unavailable to you. Want to Upgrade?

To: KLP who wrote (17371)	3/7/2000 1:35:00 AM
From: KLP	Read Replies (1) \| Respond to of 28311

FYI -- Interview: Investing in the new ecomony by Philip Coggan...FT article.... news.ft.com From FT Mar 6, 2000 Interview: Investing in the new economy By Philip Coggan - 6 Mar 2000 21:05GMT Investors are struggling to make sense of a stock market where many previously reliable blue chips have plunged in price and companies with new names and no profits have soared. Brennan Hiorns, chief investment officer of Taylor Young Investment Management, has been an enthusiast for technology stocks for some time. FT.com asked him how he picked his portfolio. Why do you like technology stocks? It is, first of all, based on an understanding that we live in times of low inflation, GDP and corporate earnings growth. You have to find new companies with new ideas capable of double digit earnings growth. Technology groups are a set of companies, a bit like steam engine manufacturers in the 1830s, that can look forward to a generation of rapid growth. How do you go about selecting companies? You have no criteria of the kind established since the 1930s. The price-earnings ratio is no use at the moment; it was the instrument of the value era. The concept I find useful is to imagine that I was trying to build a Global Megacorp: which companies would I want to take over because they have essential hardware, software or management concepts. So you would want Baltimore for its encryption software or Autonomy's intelligent web search software. There are also some big telecommunications stocks which could prove attractive: Colt Telecom, because of its fibre optic network and even BT, if it is fast on its feet. So price doesn't matter? It is very difficult to decide what price is when you're trying to spot a company which is quite small today but may be the equivalent of Standard Oil in 10 years' time. If it is a great concept, price becomes an irrelevant issue. Are you equally enthusiastic about all tech sectors? I wouldn't buy dotcoms because I think they are ephemeral. You are just buying access to the system. But I am very keen on the business-to-business area of e-commerce which I see as a huge area of growth. With all these companies, you have to ask yourself: what is the size of the potential market in five years' time? And what is their share of the market likely to be? How do you know when to sell? Do you have long term price targets? The kind of companies I am talking about are those where if you locked them away for 10 years, you should be pleasantly surprised when you dig them out again. This is not a bubble, this is not just sector rotation. You are really trying to pick the industries of the next century.